FX.co ★ Euro Holds Above $1.17 as ECB Holds Course, Fed Faces Rate Cuts

The euro maintained its position just above $1.17, staying in proximity to the four-year peak of $1.192 reached last month, as investors evaluated the expanding policy divergence between the European Central Bank (ECB) and the Federal Reserve. According to Eurostat, inflation in the Eurozone accelerated to 2.2% in September, up from 2.0% in August, slightly surpassing the ECB’s median target. Vice President Luis de Guindos reiterated that the current interest rates remain “adequate,” with decisions to be taken “meeting by meeting,” indicating little inclination towards immediate easing. Meanwhile, the US dollar saw a decline as the Federal Reserve is anticipated to proceed with consecutive 25 basis point cuts in its last two meetings of the year. Market sentiment dampened following ADP data that showed an unexpected drop in private-sector employment, heightening concerns about the labor market's strength. Investors are also preparing for the potential repercussions of a possible US government shutdown, the first in seven years.